Hi All,
As we all know BEP is a state where my expenses are nullified by my revenue.
Contribution = Sales-V.C
BEP in INR = FC/PV ratio
BEP in Units = FC/ contribution per unit
Now, Sales = 100000 INR, VC is 60000 INR , FC is 30000 INR.
So as per formulae above we have,
Contribution @ 40000 INR
PV @ 0.4
Now BEP in INR is 75000(30000/0.4)
Formula states that @ 75000 i will be nullify my expenses.
Actually my expenses is 90000(60000+30000).
Why am I getting this difference?
Kindly correct if I'm wrong.
Thanks in advance.
CAclubindia
